SHIPBROKING &

CHARTERING PRACTICES

AN INDUSTRY PERSPECTIVE

FOR UNIVERSITY OF PIRAEUS

SPRING 2013

Vasilis Mouyis

Doric Shipbrokers S.A.

What is Chartering?

• Transactions between Ship and Cargo Owners

• Shipowner

– Employment type and duration

– Counter-party assessment

– Prevailing market conditions…

• Charterer

– Freighting of cargo

– Vessel and Owner evaluation

– Optimal freight execution considering the

market…

And Shipbroking?

• The intermediation medium that

consummates transactions.

• Shipbrokers are employed by

shipowners and charterers

respectively to undertake

negotiations.

• Post fixture servicing and charter-

party drafting

Chartering through the Ages to

Present

• Transformation through the early days of commerce

• Baltic Exchange the former common denominator of chartering transactions.

• Efficient communications and chartering expertise dispersed across the globe

• Market the vessel to their contacts

inviting offers (circular)

• Collect and evaluate cargo

requirement workability for ship

• Calculate earnings – Net Time

Charter Equivalent (TCE)

Shipbroking Role in the Chartering Domain As Owners Representative

• Recommend / guide shipowner as to

the pertinent potential employment

• Upon Shipowner’s decision evaluate

standing/reliability of Charterer

• Initiate Negotiations

Shipbroking Role in the Chartering Domain As Owners Representative

• Market the Cargo

• Collect proposed ships & check their

suitability in commercial and

technical terms

• Screening of Owners / Vessels

• Calculate the cost of freight – Net

Voyage Equivalent

• Initiate Negotiations

Shipbroking Role in the Chartering Domain As Charterers Representative

Shipbroking Role in the Chartering

Domain – Negotiations

• Indication

• Firm Offer

• Counter Offer

• Fixing on subjects including details

• Recapitulation of Main Terms Fixture

(Recap)

• Negotiation/Agreement of details

• Final Recap

Trends in the Field of Chartering

• Voyage Chartering

– Single voyage & COA’s

• Time Chartering (TC)

– Single trips and period charters

– Profit Sharing Agreements

Trends in the Field of Chartering

• Role of operators

– Booking cargoes (COA’s)

– Service Traders for forward sales

– Chartering-in ships on long period

– Speculators or service providers?

– Expertise and reputation paramount to

their success

Trends in the Field of Chartering

• Derivatives (FFA’s)

– Hedging or Speculation

– Over-The-Counter or Cleared

– “Paper Trading” relevance to the

physical world

– Psychology and the forward curve

Trends in the Field of Chartering

• Baltic Exchange Indices

– Baltic Dry Index (BDI)

• BCI / BPI / BSI / BHSI

– Settlement of FFA’s

– Chartering Tools (index linked) and

challenges ahead

BDI CURVE 1985 TO PRESENT

GOES INTO

TAILSPIN

HITTING A LOW

OF 647 IN FEB

‘12…

2003 – 2008 THE SUPER

CYCLE PEAKS AT

11,793!!! STARTS AT 1000 POINTS IN 1985 BDI YESTERDAY

08TH APRIL 2013 :

858

Chartering the Human Touch

• Skills to be developed and nurtured

– Information seeking: out of the box

– Analytical: collate and analyze market

data and trends

– Relevant legal and regulatory

developments: sharpening C/P technical

proficiency

Chartering the Human Touch

• People Skills

– Emotional Intelligence (EQ)

– Communication & negotiating

– Networking

• Reputation

– Integrity: “Our word is our bond”

• A combination of Science and Art: the

difference man makes to ship and cargo

From Desk to Ground

What they Don’t Teach You at

Harvard Nor

University of Piraeus …

Thanks for your Time & Attention!